Washington-Led Coalition Wins Court Ruling Protecting Federal Homelessness Funding

A federal court has blocked a U.S. Department of Housing and Urban Development funding policy that Washington state officials said could have jeopardized permanent housing for more than 2,900 Washington residents and tens of thousands of people nationwide.

Washington Attorney General Nick Brown, along with attorneys general from New York and Rhode Island, led the multistate coalition challenging HUD’s attempt to redirect $1.3 billion in Continuum of Care funding toward new projects, including transitional housing. The coalition argued that the change would effectively limit the amount of federal funding available for existing permanent housing programs.

The U.S. District Court for the District of Rhode Island granted key portions of the coalition’s motion for summary judgment, ruling that HUD’s funding set-aside was unlawful and could not be implemented.

“The lawlessness happening in our federal agencies has real consequences for people who are struggling to get by,” Brown said. “With this victory, we’ve protected funding for housing in Washington and provided stability for Washington families.”

The ruling is the latest development in a broader legal fight over the federal government’s approach to homelessness and the future of HUD’s Continuum of Care program, one of the nation’s primary sources of federal funding for local homelessness services and housing programs.

For more than two decades, HUD has supported permanent housing programs and the Housing First model, an approach that prioritizes moving people experiencing homelessness into permanent housing without first requiring them to meet conditions such as maintaining sobriety or reaching a minimum income threshold.

The current federal administration has sought to move away from that approach, prompting a series of legal challenges over changes to Continuum of Care funding.

Washington and other states previously challenged HUD after the agency attempted to impose new conditions on billions of dollars in Continuum of Care funding, including a cap on the amount that could be used for permanent supportive housing. A federal court in Rhode Island struck down that effort as unlawful in June.

After that ruling, HUD issued a new notice of funding opportunity that would have reserved $1.3 billion for new projects emphasizing other approaches, including transitional housing. The states argued that although the new policy did not explicitly impose the previous cap, it would have produced a similar result by reducing the amount of funding available to renew existing permanent housing projects.

According to the National Alliance to End Homelessness, the change threatened housing assistance for at least 97,000 people living in Continuum of Care-funded permanent housing nationwide, including more than 2,900 people in Washington.

Washington subsequently led another coalition challenging the new policy, arguing that HUD was attempting to accomplish through a different funding mechanism what the earlier court ruling had prevented it from doing directly.

The court’s decision prevents HUD from implementing the disputed set-aside, preserving access to federal funding for permanent housing projects while the broader legal and policy fight over federal homelessness programs continues.

Continuum of Care funding supports local and regional efforts to address homelessness, including permanent supportive housing for people who may need ongoing services to remain stably housed. The program distributes federal dollars through local Continuums of Care that coordinate housing and homelessness services within their communities.

The ruling has particular significance in Washington, where communities rely on federal Continuum of Care dollars to maintain housing and services for people experiencing homelessness. In Seattle and King County alone, the regional Continuum of Care receives approximately $66 million in federal funding supporting housing and homelessness services for more than 4,500 residents.

Brown co-led the lawsuit with New York Attorney General Letitia James and Rhode Island Attorney General Peter Neronha. Attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Virginia, Wisconsin and the District of Columbia also joined the case, along with the governors of Kentucky and Pennsylvania.